GenOn Energy plans to shut down Avon Lake facility in April 2015

AVON LAKE -- GenOn Energy plans to shut down its Avon Lake electric producing plant in April 2015, according to a statement from the company yesterday.

The company said the cost of complying with environmental regulations would be a losing proposition financially. The 763-megawatt power station, 33570 Lake Road, burns coal and fuel oil to power the generators that create electricity at the plant.

"This is very discouraging," Avon Lake Mayor Greg Zilka said, adding that the city and Avon Lake City Schools will lose a substantial amount of money from the income and property taxes generated by the plant.

Beginning in April 2015, the city will lose over $78,000 in income taxes and around $134,000 in property tax based on city numbers from 2011, Zilka said.

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Avon Lake Schools Superintendent Bob Scott said the district stands to lose $2.4 million dollars per year as a result of lost public utility taxes.

"That's going to be just a devastating amount," he said. The district will also lose tax revenue from property taxes, but Scott didn't provide an estimate on that figure, which he said will be calculated by the county auditor.

"It's what the trend has been for the last several years," Scott said. "This last year, with the dropping property values and the last state budget, we're definitely heading in the wrong direction as far as revenue goes for the school system."

Before the GenOn announcement, Scott said the district was planning on cutting 10 teaching positions in the spring, and is offering retirement incentives.

This is not the first time the school district has been affected negatively by the power plant, Scott said. In 2009, the plant, then called RRI Energy Plant, dropped in value by 35 percent, causing the district to lose more than $1 million per year in taxes.

Mark Baird, spokesman for GenOn Energy, said the plant employs around 80 people, but said he did not say how many would lose their jobs.

"Staffing after the plant is deactivated has not been decided," he said.

Baird added that GenOn does not expect any changes to the structural facility after deactivated.

"The company does not anticipated any material changes to the structures or the site at this time," he said. "We will maintain the site appearance while the plant is in a deactivated state. Any proposals to remove the structures on the site will be evaluated to determine if such actions are economic."

The company, however, left the door open to change its plans. It said it will continue to review market conditions, which could make the financial return, of the necessary environmental investment, sufficient to keep the plant open.

GenOn also will retire six other coal-fire power plants in Ohio and Pennsylvania, including its Niles plant, set to close in June 2012. The Pennsylvania plants are in Portland, Shawville, Titus, New Castle and Elrama.

In December, the EPA issued new Mercury and Air Toxics Standards, the first national standards to cut coal- and gas-fire power plant emissions and toxic air pollution including arsenic, acid gas, nickel, selenium, and cyanide.

The EPA estimated the new safeguards will prevent as many as 11,000 premature deaths and 4,700 heart attacks a year. The standards will also help prevent 130,000 cases of childhood asthma symptoms and about 6,300 fewer cases of acute bronchitis among children each year, according to the federal agency.

Early in 2011, the EPA sent a notice of violation that between March and May 2007, GenOn, then owned by Reliant and Orion Power Holdings Inc., "made various physical changes and/or changes in the method of operation at the Avon Lake generating station" resulting in "significant emission increases" of gases, according to the notice of violation.

The company did not obtain a permit to make those changes, as required by the Clean Air Act, according to the notice of violation. Baird said at the time the company was working to resolve the matter with the EPA.

The power plant has gone through numerous name and ownership changes over the years. The 50-year-old plant was built and operated by Cleveland Electric Illuminating Co. It was auctioned in 1999 to Orion Power by its interim owner, Duquesne Light Co., following a deal with FirstEnergy. In the past decade, it was owned by Reliant Energy Inc., and then RRI Energy, before GenOn.